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Winn-Dixie Q2 Net, ID Sales Up

Company narrows net loss

October 31, 2011, 08:00 pm

For the first quarter of its fiscal 2012, a 12-week period that ended on Sept. 21, Winn-Dixie Stores Inc. reported net sales of $1.6 billion, an increase of $48.2 million or 3.1 percent from the year-ago period. Identical-store sales rose 3.3 percent over last year, spurred by a 5.5 percent increase in basket size partially offset by a 2.1 percent decline in transaction count.

First-quarter IDsales were positively affected by ongoing retail inflation, favorable results from the company’s “fuelperks!” gas rewards program and computer-generated ordering initiative, and a sales increase at “transformational” remodeled stores, partially offset by competitive activities and general market factors.

Winn-Dixie posted a net loss of $24.1 million, or 43 cents per diluted share, for the first quarter of fiscal 2012, vs. $76.8 million, or $1.39 per diluted share, for the same period last year. The company reported net income from discontinued operations of $0.5 million, or one cent per diluted share, for the first quarter, as compared with $40.3 million, or 73 cents per diluted share, in the year-ago period.

For continuing operations, Winn-Dixie’s net loss was $24.6 million, or 44 cents per diluted share, for the first quarter of fiscal 2012, compared with $36.5 million, or 66 cents per diluted share, last year.

Peter Lynch, chairman, CEO, and president of Jacksonville, Fla.-based Winn-Dixie, said he was “very pleased” by the grocer’s financial performance, adding: “We generated substantial sales and adjusted EBITDA growth over the prior year, driven by continued positive sales growth from the previous quarter and expanded margins despite an inflationary environment. Further driving this outcome was prudent expense management and a merchandising and operational focus on delivering personal, fresh and fun experiences for our guests. In addition, we successfully grand-opened two more transformational remodeled stores that are generating promising financial results and building brand equity in their respective markets. Through the first five weeks of the second quarter, we continue to experience identical-store sales growth that has exceeded our first quarter performance, in line with our expectations.”

Gross profit on sales for the first quarter of fiscal 2012 was $437.1 million, an increase of $13.8 million vs. the same period in the prior fiscal year. As a percentage of net sales, gross margin was 27.5 percent for the first quarter, an increase of 10 basis points from last year. The company attributed the increase in gross margin to improvements in other costs, including warehouse costs and inventory shrink, which were partially offset by a higher LIFO charge in fiscal 2012 as compared to fiscal 2011.

The grocer’s capital expenditures for fiscal 2012 are expected to be about $200 million, of which around $125 million will be used for a store remodeling program and the new store development pipeline. The additional $75 million is expected to go toward retail store improvements and maintenance, IT systems, warehousing and transportation.